GOLD inched up on Wednesday (Jul 27), as the dollar weakened slightly, while investors waited for a key decision on interest rates from the US Federal Reserve which could influence the outlook for bullion, amid growing worries over the state of the economy.
Spot gold firmed 0.1 per cent to US$1,718.97 per ounce, by 12.41 am GMT, while US gold futures dipped 0.1 per cent to US$1,716.70.
Wall Street equities fell and US Treasuries rallied on Tuesday, a day before a likely Federal Reserve rate hike as investors grappled with growing economic concerns with signs of a looming gas supply crisis in Europe.
The US central bank is widely expected to raise interest rates by another 75 basis points at the conclusion of its policy meeting on Wednesday.
Higher interest rates and bond yields increase the opportunity cost of holding non-yielding bullion.
The dollar eased slightly after a sharp rise on Tuesday. A weaker dollar helps gold's appeal among buyers holding other currencies.
US consumer confidence dropped to a near 1-1/2-year low in July amid persistent worries about increasing inflation and higher rates, which could undercut spending, pointing to slower economic growth at the start of the third quarter.
The global economy is in the grips of a serious slowdown, with some key economies at high risk of recession and only sparse meaningful cooling in inflation over the next year, according to Reuters polls of economists.
Spot silver rose 0.4 per cent to US$18.68 per ounce, platinum gained 0.3 per cent to US$876.22, and palladium firmed 0.4 per cent to US$2,017.56. REUTERS